May 2008

No magic bullet

Skilled labour shortages in Canadian mining

By
D. Zlotnikov

It is estimated that the Canadian minerals and metals sector will face a shortage of 92,000 workers by 2017. In a 2005 study carried out by the Mining Industry Training and Adjustment Council, 40 per cent of workers in the industry indicated that they were planning to retire within the next decade — 44.6 per cent from the skilled trades. Already, mining companies of all types, sizes and geographic locales are beginning to feel the pinch.

Commodity prices are setting new records, while operational costs are continuing to climb. The sudden jump in the sector’s appeal to investors is creating shortages that even the most generous of cash injections can’t fix. These deficiencies are occurring on the equipment and consumables side, but the impact is threatening to be even more drastic from the lack of trained workers in all mining-related occupations.

Poaching not going over easy

With workers in such limited supply, a great deal of competition is expected in the short term as firms struggle to outbid each other, both in monetary and non-monetary compensation. This approach certainly has its downsides, considering where the trained workers are coming from.

“There used to be a mutual respect of a sort in the industry,” explained mining consultant Dave Bazowski, who has spent a significant part of his 30-year career working on HR projects. “You didn’t do your recruiting in the other guy’s back yard. But now that there’s all this pressure to find the people you need, that has gone out the window.”

The trend is for the majors to hire away from the smaller companies, support contractors and from the public utilities sector. Ultimately this approach is not sustainable.

“I hope the majors realize that they are creating some significant medium- and long-term pain for some very short-term gain,” explained Paul Hébert, executive director of the Federated School of Mines. “[By poaching] they are transferring training burdens onto the portion of the sector that arguably has the least capacity for it.” Hébert certainly helps to bring a Canada-wide perspective to this discussion as, until recently, he was the director of the Mining Industry Human Resources Council.

The situation has had staffing implications on other sectors as well. Peace River Coal CEO Trevor Hulme told of severe shortages of even unskilled labour near the company’s Trend mine site. Restaurants located in the town of Fort St. John, British Columbia, about an hour from the site, had to close because they couldn’t find any high school students to employ.

However, the Canadian mining industry’s distinguished reputation means that it must also contend with international recruiters, most notably from Australia, which is experiencing its own mining boom. Enticed by the exotic location and high salaries, young graduates are leaving with increasing frequency. Once there, it has not been unheard of for engineering grads to garner six-figure salaries, even when they have very little experience. Of course, the “poaching” is not limited to Australia; South Africa and the BRIC (Brazil, Russia, India and China) countries are all experiencing massive growth in mining and are looking everywhere they can for trained professionals.